If Velocity Is Constant in the Long Run, Which of the Following

question 25

Multiple Choice

If velocity is constant in the long run, which of the following results flow from the quantity theory of money?

• A) A change in the money supply changes real GDP by an equal percentage.
• B) A change in the money supply changes nominal GDP by an equal percentage.
• C) A change in the money supply changes real interest rates by an equal percentage.
• D) A change in the money supply changes consumer lending by an equal percentage.

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Definitions:

Sample Size

The number of subjects or units included in a study or experiment, impacting the validity and reliability of the statistical analysis.

Research Hypothesis

A statement made by researchers when they speculate upon the outcome of a research or experiment.

Binomial Distribution

A probability distribution that represents the number of successes in a fixed number of trials, each with the same probability of success.

Alpha

In statistics, it denotes the significance level used in hypothesis testing, typically set to 0.05 or 5%, representing the probability of rejecting the null hypothesis when it is actually true.